GUIDE ON EMIGRATING TO INDIA

Buying a Property in India

Over the last couple of decades India’s property market has really started to take off, and luxurious residential properties have sprung up all over the place to meet the demands of an emergent middle class.

Although the process of buying property in India has become less complex in recent years, for foreigners there’s still quite a lot of red tape to wade through.

And as India is so large, and encompasses such a varied landscape, some regions are far more popular than others. Karnataka, Goa and Kerala are among the most sought after regions when it comes to stylish residential property, although Bangalore and Mumbai generally appeal more to the career-led professional.

Property prices can vary considerably depending on the region and type of property.

Buying

The majority of people who emigrate to India for work rent a property, but for those who wish to buy there are some strict guidelines to adhere to.

Any foreign national’s wishing to by an Indian property must have a residence permit.

A foreign national is prohibited from owning a property in India unless they meet the residency requirement of living in India for 183 days of the financial year (although the Reserve Bank of India does sometimes grant special permission for this, and the rule doesn’t apply to Overseas Citizens of India or Person’s of Indian Origin)

Indian property cannot be purchased by a foreign national holding a tourist visa.

Indian property cannot be jointly purchased by an eligible and non-eligible person (e.g. a foreign national can’t buy a property with a non-resident Indian.)

So if you are a resident of India who lives in the nation for over 182 days a year you can buy a property without the permission of the Indian central bank, although you will need the approval of local authorities. Also note that private individuals are only able to buy residential properties.

You will need to establish your own company in India if you intend to purchase office space or residential property for rental purposes. And any rental income earned through an Indian property can only be held in an Indian Rupee account – it can’t be transferred to your country of origin.

Bear in mind that the rules can change and do differ regionally so if you’re thinking of investing in an Indian property it’s highly recommended that you seek independent and reputable legal advice, and have all documents thoroughly checked before you exchange any money.

Below we have outlined the basic steps involved in purchasing an Indian property.

Step One: Research! Before you take any solid steps towards buying an Indian property have a firm idea in your mind of exactly what you’re looking for. Research the local market and set yourself a budget.

Step Two: Once you’ve selected a property and a price has been agreed between you and the seller an agreement of sale will be drawn up. Check this over carefully (or have it checked over) before you sign it and have your lawyer check that the seller is the property’s legitimate owner. Your lawyer should also ensure that there aren’t any outstanding mortgages on the property. The seller should provide you with a no encumbrance certificate, stating that the property isn’t already mortgaged.

Step Three: A deposit of between 10-20 per cent of the property’s total price must be paid to the seller – NEVER pay this deposit in cash.

Step Four: Use an Indian bank to act as a mediator when you pay for the property.

Step Five: When all the documentation has been approved get it stamped at the Stamp Duty Office.

Step Six: Once you and the seller have signed the stamped documents you must pay the outstanding amount and register with the Registry of Deeds. Final governmental duties are now payable, including Stamp Duty. (The amount of Stamp Duty payable varies significantly according to the region). A registration fee will also have to be paid.

Although expats can take out mortgages in India, loan conditions aren’t great and you may find you’re better off using the financial channels open to you in your country of origin.

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